The value of individual donations reached a record in 2002. But then it fell. The worry is that it’s the start of a trend. But there is an even bigger worry: the number of people who give to charities has fallen sharply. The question is why.

It seems unlikely that we have become more hard-hearted. We have never been overly generous — on average we give less than £3 a week — but we do respond when we can see a clear need. Readers of this newspaper dug deep when last year’s Christmas appeal was made for the victims of Darfur. And we all know what happened in response to the Asian tsunami.

But in both those cases people could not only see the need; they also reckoned the money would be put to good use quickly and effectively.

In other words, we are happy to give but we want to know that our hard-earned money really will be used to alleviate suffering, with the minimum amount wasted on bureaucracy.

The charity industry has changed a great deal over the years and many people are uneasy. The clue lies in that phrase: the “charity industry”. Charity is big business — far more than the £7 billion raised in individual donations. Billions are raised in corporate sponsorship and grants handed to charities by the government from our taxes. Some of the biggest get about half their income from the Treasury. And almost 600,000 staff are employed.

Many charities spend big money either trying to persuade government to do things or trying to persuade us to change our ways. Health charities want smoking bans. Animal charities want hunting bans. Children’s charities want laws to stop us smacking our children.

Many think this is a good use of donations. Others question it. Those are some of the reasons why earlier this year I set up my own charity — the Kitchen Table Charities Trust. Feel free to question my sanity. Aren’t there too many charities already? Well, yes and no.

Most charities are small — very small. They often result from a few people sitting around a kitchen table and deciding they could make a difference. And by God they do. They help a vast number of the most vulnerable people.

What they are not very good at is raising money. They don’t get grants from the government, they can’t afford to advertise and they don’t have marketing budgets. Every penny is spent on doing what they were set up to do.

Let me give you an idea of the sort of charity KTCT has been helping. The Mango Tree (founded by a Liverpool couple) cares for children in southern Tanzania whose parents have died — often from Aids. They don’t dump them in orphanages. That’s expensive and they end up becoming institutionalised. Instead they are kept in their villages.

The charity gives “guardians” — usually members of the child’s extended family — enough help to be able to care for them. If they have become undernourished or sick there is a nutrition centre and a clinic. The children are encouraged to go to school by receiving uniforms and books. That costs £4 per child.

There are 4,500 children in 36 villages being given a new life by this one small charity. All the staff are local people.

How much did all this cost? The total operating budget for this year was £67,000. That is rather less than the salary and benefits of one senior British charity executive.

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There are endless examples of other small charities doing equally good work. Street children lead desperate lives in the Third World. The KTCT has helped to fund some of the charities that rescue them, give them a bed to sleep in, show them some love and help to educate them.

I spoke to one boy who had ended up on the streets when his father died. Without help he would have become a prostitute and died from Aids or have stolen food and ended up in jail. Instead he is on his way to becoming a skilled carpenter.

I have been to an extraordinary little hospital that does more cataract operations in a day than most British hospitals do in a month. They send a rickety old bus out into the villages. It brings back blind people and two days later takes them home able to see.

There is a tiny charity in Dar es Salaam that takes men crippled with polio off the streets and teaches them to weld. They create sculptures out of waste metal which they then sell.

There is a growing number of micro-loan organisations that hand out small sums — maybe £20 — to women who have been widowed. It helps them to set up tiny businesses. They almost always succeed and pay the money back, so it can then be loaned to someone else.

There is a hospice for women with cancer who can die in some dignity, reasonably free of pain and knowing that their children will be cared for.

All these tiny charities have one thing in common: a struggle to raise enough money to keep going. That is what the KTCT does. We raise the money and feed it to those who are doing such extraordinary, life-affirming work.

This article is not meant as a reproach to the big charities who raise and spend tens of millions. I know they do a good job. But I also know — because of the extraordinary response since I first wrote about this nine months ago — that there are millions of people in this country who would give more if they knew that their money would really change lives. Well, it can and it will.

Next week: a report from charities in Tanzania

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